Construction of new multifamily housing is on the rise in Massachusetts, which is welcome news for planners and state officials who say the state has long had a shortage of rental units.

Last year, Massachusetts cities and towns issued more permits for new multifamily units than any year since 2006, according to data recently released by the state Office of Housing and Economic Development.

“We are definitely seeing an upturn in the development of multifamily housing, particularly rental,” said Marc Draisen, executive director of the Metropolitan Area Planning Council. “I think it reflects a stronger economy and an increasing demand for rental housing.”

The 7,601 multifamily housing permits issued in 2013 reflect a 50 percent increase over 2012. That total covers new construction and excludes group quarters, such as dormitories, rooming homes and transient housing.

“Multifamily” is a designation applied to housing other than a single, detached home. The designation covers rentals and units for sale, and includes multi-unit apartment buildings, condominiums and triple-deckers.

Unlike the U.S. Census Bureau, Massachusetts also applies the “multifamily” label to townhouses and classifies commercial buildings that have been converted to residential units as “new construction.”

The MAPC, a Boston-based organization that serves 101 communities stretching from Gloucester in the North, to Framingham in the West and Duxbury in the South, released a report in January projecting that metro Boston will need to add up to 435,000 new housing units by 2040 to keep its economy on track.

The Patrick administration, focusing on retaining and growing the statewide workforce, set a goal in 2012 of producing 10,000 new units of multifamily housing each year through 2020.

“Without the housing, we’re not going to be able to keep our young people and our young families here,” Secretary of Housing and Economic Development Greg Bialecki said. “We need to be building about 10,000 additional units a year, multifamily. For that 25-to-35 cohort, some of them will own houses, but most of them want multifamily housing. That’s a number we can say we need if we want to reverse our trend of young people leaving.”

The goal, Draisen said, also aligns with a change in attitude, particularly among young families. While previous generations aspired to own homes on acre lots far away from large cities, many in the younger generation now prefer to be close to cities and public transit, with greater access to cultural and social activities.

“It tends to be concentrated in what I call urbanized areas,” he said. “Not just cities, but it could be a suburban downtown, a town center, a rail station or even near a highway interchange. People, particularly young families, have a preference to be in an area where things are going on.”

Page 2 of 4 - Bialecki, as an example, pointed to a recent push from the state government to encourage new construction in communities north of Boston by providing funding for infrastructure upgrades to facilitate new growth in places such as Somerville, Malden, Chelsea, Revere and Everett.

“They are renting for a lot less than basically the same quality apartment in a Boston neighborhood,” Bialecki said.

Draisen said much of Eastern Massachusetts has been grappling with a chronic shortage of reasonably priced housing for many years.

“Throughout the past recession, housing prices fell substantially, then began to rebound,” he said. “But rents continued to go up the whole time, which is odd for a recession. The reason for that is we have a long-term, very persistent shortage of rental housing in the Boston region. We just don’t have enough and we haven’t for decades.”

Building more rental units will bring rents down in the long term, he predicted, while a failure to provide housing at reasonable prices could cause a future generation of workers to leave the commonwealth.

“We have to increase housing supply, and we have to bring down or at least stabilize the cost of renting or owning a home,” he said. “If we can’t do that, we will have a difficult time attracting businesses here.”

Taunton, with a population just under 60,000, issued 22 new multifamily permits in 2013 compared to three in 2012, according to the census bureau.

But that number is deceiving when one considers that all 22 permits last year were issued, according to Taunton Housing Authority executive director Colleen Doherty, on behalf of the city’s Fairfax Gardens HOPE VI revitalization project.

That housing construction project — made possible through private investment, tax credits and federal funding — is replacing Fairfax Gardens housing project on DeWert Avenue with a total of 160 mixed-income apartments and townhouse-style units at two separate sites.

And although Taunton doesn’t have as high a concentration of existing multifamily units as Fall River or New Bedford, it does have its share of former single-family houses that through the years have been broken up into apartments.

Dale Myford said he was going through a divorce in 2013 and thought about buying a single-family house. But he says even if one buys a house at a foreclosure auction in Taunton the subsequent investment in repairs and upgrades can be financially daunting and untenable.

And so, on the advice of his real estate agent, Myford began looking for an existing multifamily. He ended up spending $327,000 for a large, three-story, 138-year-old house at 31 Ingell St.

“It’s perfect,” Myford, 57, said, adding that the former owner, who lived there for at least 30 years, was diligent about the upkeep of the building, which consists of a three-bedroom apartment on each floor.

Page 3 of 4 - Myford, who lives on the top floor in the smallest of the three apartments, said he’s fortunate to have “really good tenants.”

He also said he’s considering looking for another multifamily house as a long-term investment — which he said makes sense considering that he was laid off in December after 25 years at Taunton’s General Dynamics facility, where he was employed as a building maintenance employee.

“I know how to fix things, so that should help,” an upbeat Myford said.

Myford said he was told he would have to come up with a minimum 25-percent down payment if he had bought a Taunton multifamily consisting of four or more units. That alone, he said, was enough to convince him to buy the three-family house.

Taunton Building Department Superintendent Wayne Walkden said he’s not surprised no permits were issued in 2013 for new multifamily construction.

“It’s more exclusive to downtown,” which is why, Walkden said, most new multifamily construction in the state takes place closer to Boston and other large cities.

“It’s not really cost-effective. The best thing for a lot of first-time buyers is to buy a starter home and take advantage of a low-interest FHA (Federal Housing Administration) loan,” he said.

Walkden said he and his wife last year finally sold their “very nice” multifamily house on Woodward’s Lane, located off of Cedar Street near downtown, in favor of building a new single-family house in a more rural setting.

He said they invested thousands of dollars in upgrades and repairs over a 25-year period but that the national recession took its toll, so that by the time they sold the house its assessed value had depreciated well below what he thought it was worth.

David Pottier, a Taunton city councilman, said he and his wife, after moving to the city in 1998, bought and moved into an old Victorian on Elm Street that had been converted into apartments. After about four years, he said, they had had enough.

“Good tenants are wonderful, but bad tenants are the worst,” Pottier said, noting that the “day-to-day hassle” of making repairs, responding to tenants’ complaints and making visits to housing court convinced him and his wife to sell.

By the time they did, Pottier said, the market had soured and they barely broke even on their original investment.

“It’s like death by a thousand paper cuts — a lot of work goes into (being a landlord),” he said.

Not everyone has embraced multifamily housing. Some towns, particularly rural or suburban towns, do not allow multifamily housing. Others only allow it with a special permit. Some have expressed concerns that a sudden population growth could strain municipal services and school systems.

Page 4 of 4 - An important aspect of the state’s overall plan, Bialecki said, is to work with individual communities to update zoning regulations.

“In the past, that’s an issue where there’s been a tug of war between the state and the communities. It was always an eat-your-vegetables strategy,” Bialecki said. “What we’ve tried to do now is talk about the ways adding new housing can actually make more interesting neighborhoods and stronger communities.”

As an incentive to towns, the state often offers funding for local infrastructure improvements in communities that attract new construction of multifamily housing. The state, he explained, also offers tax incentives to developers who build in “Gateway Cities,” midsize urban centers that have struggled as the state’s economy has shifted away from manufacturing.

The executive branch, to some extent, is able to use funding to promote priorities on the local level. For communities along the proposed South Coast Rail route, for example, technical assistance grants are available to help implement the corridor plan. That plan promotes increased multifamily housing construction clustered around proposed rail stops.

At the Southeastern Regional Planning and Economic Development District, a regional agency serving 27 communities in southeastern Massachusetts, planners have noticed some signs that towns are preparing for an influx in multifamily housing.

“We have seen an increase in requests for zoning assistance for mixed-use zoning and multifamily housing,” said Sandra Conaty, SRPEDD’s deputy director and comprehensive planning manager. “SRPEDD definitely helps out communities when they want zoning amendments or zoning assistance. A lot of times towns don’t have staff in house.”

— Gerry Tuoti is the Regional Newsbank Editor for GateHouse Media New England. Email him at gtuoti@tauntongazette.com or call him at 508-967-3137.

— Charles Winokoor is a staff writer with the Taunton Daily Gazette Email him at cwinokoor@tauntongazette.com.